February 13, 2018

Court upholds exclusion clause in engineering contract - again

In The Thistle Company of Australia Pty Ltd v Bretz & Anor,[1] a Queensland court again accepted the operation of an exclusion clause in a professional consultancy agreement.

The case concerned personal injuries suffered by the first respondent following a trip and fall at a service station in Bundaberg.  The first respondent tripped on a raised platform surrounding a petrol bowser.  The first respondent commenced proceedings against the owner and occupier of the service station, the appellant, for breach of duty.  The appellant joined as a third party the second respondent, the engineering firm which designed the service station including the raised platforms around the petrol bowsers.  The appellant alleged the second respondent's design was negligent and/or in breach of contract because the raised platform extended beyond the petrol bowser creating a tripping hazard.

In the judgment below, the trial judge found that the appellant breached its duty of care to the first respondent by painting the raised platform the same colour as the surrounding ground, which obscured the visibility of the raised platform and failed to warn entrants of the change in ground level.  The trial judge dismissed the third party proceedings against the second respondent on the basis of an exclusion clause in the second respondent's contract, which provided:

"After the expiration of one (1) year from the date of invoice in respect of the final amount claimed by [the second respondent]…, [the second respondent] shall be discharged from all liability in respect of the services whether under the law of contract, tort or otherwise."

On appeal, the Court of Appeal dismissed the appellant's submissions that the exclusion clause did not apply because there was insufficient evidence of when the final amount was claimed by the second respondent and because the second respondent's alleged liability did not arise in respect of its services provided under its contract.  The Court of Appeal upheld that the exclusion clause operated to exclude liability of the second respondent, if any, relating to the incident and the first respondent's injuries.

This decision is another example of Queensland courts accepting limitation and exclusion clauses widely used by design professionals in industry-standard contracts.  In 2015, the Supreme Court accepted a similarly worded exclusion clause in Surfstone Pty Ltd & Anor v Morgan Consulting Engineers Pty Ltd.[2]

[1] [2018] QCA 6 (9 February 2018).
[2] [2016] 2 Qd R 194, which was not disturbed on appeal.